Feds to Corbett: Switch CHIP Kids to Medicaid

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Gov. Tom Corbett's administration is being told it must shift tens of thousands of Pennsylvania children from a state-subsidized health insurance program to Medicaid, although the Republican governor is not saying yet whether he will comply with the federal directive.

U.S. Health and Human Services Secretary Kathleen Sebelius told Corbett in a Friday letter that the switch is required by the 2010 federal health care law and that it will simplify coverage for families by aligning children under the same program as their parents.

Corbett has protested that some children will have to find new doctors, but Sebelius said many other states have already prepared for the transition by eliminating age-based eligibility rules for Medicaid coverage and by extending Medicaid eligibility to children 6 or older whose families earn up to 133 percent of the federal poverty level. Advocates for the poor say children are better off under Medicaid anyway because its coverage is more comprehensive than Pennsylvania's Children's Health Insurance Program, or CHIP.

Corbett's top insurance regulator, Michael Consedine, on Tuesday called Sebelius' response "disappointing'' and could not yet say whether the administration will comply with it or seek to block it, perhaps through a court challenge.

"I don't think the governor's ready to give up the fight for this program, so we continue to evaluate our options,'' Consedine told The Associated Press.

Currently, Pennsylvania's Medicaid program covers children under 6 whose families earn up to 133 percent of the federal poverty level, and children 6 and over whose families earn up to 100 percent of the federal poverty level _ about $23,550 for a family of four this year. The 2010 federal health care law also expands Medicaid to working-age adults who earn up to 133 percent of the federal poverty level, although Corbett has said he will not allow Pennsylvania to participate without certain cost-savings concessions from the federal government.

The change for children takes effect Jan. 1, although Sebelius offered in her letter to cooperate in a phased-in transition. She also suggested that Pennsylvania can structure its child health care to make two programs appear more like one that resembles CHIP, with different plan benefits and cost-sharing obligations for some families.

Consedine said the administration will seek more information about those ideas.

He estimated that the shift would affect 50,000 children 6 and older whose family income is between 100 percent and 133 percent of the federal poverty level, and he warned that it is difficult in some parts of the state to find a doctor who accepts Medicaid.

CHIP, which currently covers about 187,000 children, is more attractive to doctors because its reimbursements are higher than Medicaid's.

Corbett, a critic of Medicaid and the federal health care law, also favors CHIP because private insurance companies play a larger role in shaping policies, and the administration says it costs the state more to cover children in Medicaid than in CHIP.

Advocates say Corbett's concerns about switching children to Medicaid are overblown because children already routinely switch between Medicaid and CHIP, due to changes in age, health, family income or size. They suggest that Pennsylvania lawmakers could also require doctors who accept CHIP to also accept Medicaid, although Consedine said that would be easier said than done.